Entertainment Gaming Asia Inc. Reports First Quarter 2015 Results And Provides Market Update

Entertainment Gaming Asia Inc. Reports First Quarter 2015 Results And Provides Market Update
Entertainment Gaming Asia Inc. Reports First Quarter 2015 Results And Provides Market Update HONG KONG, May 14, 2015 /PRNewswire/ — Entertainment Gaming Asia Inc. (NASDAQ: EGT) (“Entertainment Gaming Asia” or “the Company”), a gaming company focused on emerging gaming markets in Pan-Asia, today reported operating results for the first quarter ended March 31, 2015 and reviewed recent corporate progress. Key Financial Metrics:First Quarter of 2015 Financial Performance:All historical revenues and expenses associated with Dreamworld Pailin, which ceased operation in June 2014, have been reclassified as discontinued operations for the presented periods. Historical share amounts have been proportionally adjusted to reflect the impact of the Company’s 1:4 reverse stock split effected on February 26, 2015 for the presented periods.The Company’s first quarter of 2015 consolidated revenue was $8.3 million, an increase of 76% compared to $4.7 million in the first quarter of 2014 due to increases in both the gaming operations and gaming products business divisions.Gaming operations revenue was $4.0 million for the first quarter of 2015, an increase of 3% compared to $3.9 million in the first quarter of 2014 due to improvement in the Cambodia operations partially offset by a decline in the Philippines operations. Average consolidated daily net win per unit was $108 for the first quarter of 2015, an increase of 7% compared to $101 in the first quarter of 2014 due to the higher revenue and a 4% reduction in the total operating machine base.Cambodia average daily net win per unit was $128 for the first quarter of 2015, an increase of 9% compared to $117 in the prior year period primarily due to improved performance at NagaWorld. NagaWorld average daily net win per unit increased to $198 for the first quarter of 2015 compared to $175 in the prior year period primarily due to an increase in VIP player traffic partially offset by higher jackpots in the first quarter of 2015.Philippines average daily net win per unit was $68 for the first quarter of 2015, a decrease of 4% compared to $71 in the prior year period. The decrease was primarily due to increased competition from new integrated casino resorts in Manila, one of which opened in March 2013 and another which soft opened in December 2014. While Philippines average daily net win per unit declined on a year-over-year basis, it improved from $65 in the prior sequential quarter as the Company continued its proactive marketing strategies to stabilize performance in an increasingly competitive landscape.Revenue from gaming products was $4.3 million for the first quarter of 2015 compared to $811,000 in the first quarter of 2014. The increase was primarily a result of higher sales of gaming chips and plaques due to strong reorder levels from existing customers. The Company achieved a gross profit for this division for the first quarter of 2015 compared to a gross margin loss in the prior year period. The gross margin increase was primarily due to substantially higher production volumes, continuing efforts to improve production efficiencies and the outsourcing of certain production processes for two orders with short lead times as demand exceeded the Company’s existing capacity during the period.Entertainment Gaming Asia reported adjusted EBITDA of $2.4 million in the first quarter of 2015 compared to $960,000 in the first quarter of 2014. The Company reported net income of $570,000, or $0.04 per share, on a weighted average diluted share count of 14.5 million shares for the first quarter of 2015. This compared to a net loss of $1.0 million, or $0.14 per share, on a weighted average diluted share count of 7.5 million shares for the first quarter of 2014. The first quarter of 2014 net loss included a net loss of $157,000 from discontinued operations related to Dreamworld Pailin. Excluding the discontinued operations, the Company reported a net loss from continuing operations of $873,000, or $0.12 per share, for the first quarter of 2014.Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “We are pleased to report a positive net profit for the first quarter of 2015. The primary drivers of our performance were the significant improvements in gaming products sales and gross margin as well as the growth in gaming operations revenue. Gaming products benefitted from an attractive reorder pipeline from existing customers and our continuing efforts to improve profitability while growth in gaming operations was largely due to solid performance from NagaWorld.We are focused on continuing to improve our operating performance and securing new projects that will drive long-term growth and earnings visibility for the Company. With a cash position of over $20.0 million and as an indirect, majority-owned subsidiary of Melco International Development Limited, a leader in Asian gaming, we believe we have greatly enhanced our financial flexibility and improved our access to a broader pool of potential growth opportunities in growing gaming markets in Asia. We are actively seeking new projects that would further enhance our existing business lines and provide the opportunity to add new ones.”Entertainment Gaming Asia is hosting a conference call and simultaneous webcast at 8:30 a.m. ET today, May 14, 2015, both of which are open to the general public. The conference call number is 800/732-6870 or 212/231-2901. Questions and answers will be reserved for call-in analysts and investors. Interested parties may also access the live call on the Internet at www.EGT-Group.com. Please allow 15 minutes to register and download and install any necessary software.  Following its completion, a replay of the call can be accessed for thirty days on the Internet at www.EGT-Group.com.About Entertainment Gaming Asia Inc.Entertainment Gaming Asia Inc. (NASDAQ: EGT), an indirect, majority-owned subsidiary of Melco International Development Limited, is a gaming company in Pan-Asia engaged in the leasing of electronic gaming machines on a revenue sharing basis to the gaming industry in Cambodia and the Philippines and the development and operation of gaming venues in Asia under its “Dreamworld” brand.  The Company also manufactures and sells RFID and traditional gaming chips and plaques to major casinos under its “Dolphin” brand.  Forward Looking StatementsThis press release contains forward-looking statements concerning Entertainment Gaming Asia within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include statements regarding expectations for the Company’s slot operations business model, growth of the gaming industry in Asia, the Company’s ability to secure new gaming projects and fund those projects, expectations for the increasing profitability of the Company’s gaming chips and plaques operations and expectations for expanding its business model to new gaming platforms and markets. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, risks related to the Company’s ability to: place gaming machines at significant levels and generate the expected amount of net win from the gaming machines placed; identify and implement successful marketing and promotional strategies for the Company’s gaming projects and identify and successfully develop additional projects; acquire additional capital as and when needed; identify and implement successful marketing and promotional strategies and obtain and fulfill significant purchase orders from the customers for the Company’s gaming chips and plaques; successfully improve manufacturing processes and enhance production efficiencies for the Company’s gaming chips and plaques; adapt to potential changes in gaming policies and political stability in the countries in which the Company operates and those other risks set forth in the Company’s annual report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 26, 2015 and subsequently filed quarterly reports on Form 10-Q. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other non-cash operating income and expenses. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its operations with those of its competitors. The Company also presents Adjusted EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with generally accepted accounting principles in the United States (“GAAP”). Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income/(loss), Adjusted EBITDA does not include depreciation or interest expense and, therefore, does not reflect current or future capital expenditures or the cost of capital. The Company compensates for these limitations by using Adjusted EBITDA as only one of several comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include operating income, net income/(loss), cash flows from operations and cash flow data. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted EBITDA. Entertainment Gaming Asia’s calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.(1) Service revenue represents reimbursements of certain expenses, which for accounting purposes, are included in the revenue and grossed up in the cost of gaming operations.Logo – http://photos.prnewswire.com/prnh/20140508/85655 

About

Leave a Reply

Your email address will not be published. Required fields are marked *